Based on previously developed business models and practical experience from social enterprises, the MERSE project has developed a business model framework adapted to the specific conditions faced by social enterprises operating in rural areas. This framework is designed to support the development of sustainable, transparent, and socially driven business models. Read more about the model in the report Business Models for Rural Social Enterprises
1. Frames
The frames define the fundamental conditions and constraints within which social enterprises operate. These must be considered from the outset:
a) The Social Mission
The social mission constitutes the core of all social entrepreneurship. It represents the primary and overarching objective that guides all decisions and activities.
b) The Rural Context
The rural context must be considered at an early stage. Long distances, low population density, and dispersed structures create challenges for achieving financial sustainability.
c) Governance
Governance in social enterprises differs from that in traditional businesses. The business model must therefore include:
- Transparency and openness.
- Clear communication that any surplus is reinvested in the organisation.
d) Communication of Social Value
Communicating the social value created is essential. This is important for:
- Continuous internal improvement.
- Demonstrating value to funders and stakeholders.
- Attracting new stakeholders.
2. Structure of the MERSE Business Model
The MERSE business model is divided into three levels:
- Strategic Level
- Tactical Level
- Operational Level
Each level contains specific components (building blocks) that together form a coherent business model.
3. Components by Level
Strategic Level
At the strategic level, the enterprise defines its long-term direction through the following components:
- Social Unique Value Proposition: The core social value the enterprise delivers.
- Beneficiaries: The individuals or groups who benefit from the social impact.
- Key Resources: The critical assets required to deliver the value proposition.
- Value Network: The partners and relationships necessary to create and deliver value.
- Overall Revenue Streams:The main sources of income that finance the mission.
Tactical Level
At the tactical level, the enterprise translates strategy into practical planning by identifying:
- Key Activities
The essential actions required to deliver the value proposition. - Complementary Value Propositions
Additional offerings that strengthen or support the core value. - Customers to complementary value propositions
Customers are the paying stakeholders connected to the complementary value propositions, generating complementary revenue streams, primarily market-based income.
Operational Level
At the operational level, the focus is on financial viability:
- Revenue Calculations
Estimating expected income streams, including both mission-related and complementary revenue streams. - Cost Structure
Identifying and calculating all costs associated with the activities and operations. - Reinvestment of Surplus
Any financial surplus is systematically reinvested into the organisation to further develop its social mission and long-term impact, ensuring alignment with the principles of transparency and non-profit distribution. This principle distinguishes social enterprises from traditional profit-distributing businesses.
4. Key Issues
A central cross-cutting issue in the MERSE framework is transparency towards the external environment.
Social enterprises must clearly demonstrate that they:
- Reinvest their surplus into the organisation.
- Continuously communicate the value they create.
It is recommended to support this work through the MERSE Social Value Measurement and Communication Tool, which enables systematic assessment and communication of social impact.
Read more about the model in the report Business Models for Rural Social Enterprises
